Argentina Seen Entering Recession

Argentina’s economy enter recession in the first half of 2009, according to Buenos Aires-based Torcuato di Tella University’s Financial Research Center. The university’s index, which measures the possibility of recession based on fluctuations in consumer spending, construction activity, stock exchange performance and other economic indicators, dropped 23% in October compared to the same month in 2007, the worst since 2002, says lead researcher Martin Gonzalez. Month-on-month, the index dropped 13.9%, its third consecutive monthly drop. “This variation is of a magnitude similar to what was seen during the worst months of the 2002 crisis,” says the researcher. The latest results of the index do not incorporate the effects of the nationalization of pension funds, which took place in November, but Gonzalez says it will negatively impact the next issue of the index, to be published in January, as investor confidence continues to deteriorate.